After a disappointing opening 11 months, Lidl U.S. has replaced its top executive, effective June 15. Johannes Fieber has been appointed president and CEO of the German discounter’s U.S. operations and will be based at its U.S. headquarters in Arlington, VA. He succeeds Brendan Proctor, who had led the company’s entry into the U.S. since June 2015.
Fieber has extensive retail experience and has been with Lidl for about 10 years, serving in multiple countries where Lidl operates stores. Most recently, Fieber served as CEO of Lidl Sweden for more than two years.
“I am honored to be able to lead our expansion in the U.S., and look forward to building on the
progress that is underway,” said Fieber. “Lidl has received positive feedback from our U.S. customers, who are excited about Lidl’s unique offering and shopping experience. I look forward to continuing our expansion into additional markets this year and introducing more customers to Lidl’s high-quality products and low prices.”
A huge success in Europe with more than 10,000 stores, Lidl had been planning its U.S. entry since 2014, buying up real estate in the Mid-Atlantic and Southeast. Over the next three years, it purchased more than 100 sites, planned to open four distribution centers, and acquired a 217,000 square foot headquarters building for nearly $57 million.
When it opened its first 10 stores to much fanfare on June 15, 2017 the company, touting its European track record and extreme discount formula that would be deployed in a 36,000 square foot space, promised it would open 100 stores in the first 12 months.
While delivering on its low-price promise and scoring points with its wine and bakery departments, the discounter fell flat in several areas, most prominently in its perishable and general merchandise departments.
Sales at many of its stores quickly diminished over the initial eight-week opening period and many of the stores began to look disheveled. By late last year, it was apparent that Lidl would fall far short of its 100-store prediction (at presstime, there were 52 Lidl stores operating in six states including its newest unit on West Broad Street in Richmond which opened on May 3). Additionally, a fourth planned distribution center in Cartersville, GA is reportedly on hold as are planned expansion targets in Texas, Ohio and Alabama.
Late last year, multiple sources told us that Lidl was rethinking its new store strategy by downsizing its footprint to approximately 20,000 square feet (which would be comparable to Aldi’s U.S. units). It also approached commercial real estate brokers about possible leasing deals. However, several brokers have told us all leasing conversations have been suspended and none of the smaller sized units have yet opened.
Lidl also received criticism from Klaus Gehrig, CEO of Schwarz-Gruppe, parent firm of Lidl. Gehrig earlier this year told the German publication Manager Magazine that the company did a poor job choosing locations and didn’t recognize Americans’ shopping preferences, such as prepared foods.
It is estimated that Lidl has invested more than $2 billion in the United States to date.